Metrics, successes & flaming disasters in digital marketing

At Justinsomnia my colleague Justin Watt does the math on the number of monthly pageviews one needs to make $100k in annual ad-sales income.

The basic math works out to this: You need a million monthly pageviews if you have one ad per page, and you sell 100% of them at CPMs just over $8. Or half a million pageviews, if you put two ads on every page and keep the same CPM and sell-through rate.

There are a couple of challenges, though. First, to experience 100% sell-through on your inventory, you need to work with ad networks that sell to direct response (DR) advertisers who don’t really care where their ads run — like Google’s Adsense — and campaigns from those advertisers rarely return effective CPMs (after the ad network’s 50-60% commission) above $1, unless your site is focused on enterprise routers. I’d recommend modeling revenues based on 50% sell-through rates. Second, the brand advertisers who pay premium CPMs, which online means above $5, are more interested in audience reach and influence than they are in pageviews and ad avails. If you have fewer than 500k monthly uniques (as counted by a 3rd party like Comscore), you need to be an enormously influential brand in your own right if a major advertiser’s going to take a meeting with you. Third, even if your site is large enough and influential enough to merit high-CPM advertising from major brands, the ads won’t sell themselves. So you need to account for commissions you’ll pay to staff sellers or an outside rep firm. More on media math here.

I bet Dell’s not the first brand to use wiki software to create a living whitepaper, but they set a high bar with What It Means to Be a Digital Nomad. I can’t think of a good reason why anyone would create a static PDF whitepaper anymore.

“If you go to where the people are (i.e. Facebook, Twitter, the ‘blogosphere,’ etc) you must invest time, money, and energy to stimulate a conversation. Marketers can and do create fan pages, groups, and even applications for very little money. But creating them and getting people to use them are two very different things. The people who become a fan of you your brand within Facebook or subscribe to your brand blog’s RSS feed are the people your brand has already converted. To grow beyond that base you must invest money, time, and energy.”

Many marketers are using social media platforms to create noise — getting customers to a fan page — without joining those customers in an actual conversation. In Battelle’s response to Pete’s post, he proposes how brands can begin to converse.

“First, finding the true leaders of a community you care about, and engaging them in a dialog about how best to join the conversation they lead. What you come up with just might be something like HP’s VoicePosts, Intel’s embedding code and support of BB’s OffWorld, or American Express’ Open Forum.

“Secondly, I like the approach of determining you have something valuable to add on your own, and you might become a publisher in your own right, as long as what you build is truly valuable. That’s how you end up with Microsoft’s CrowdFire, or Asus’ WePC.com

“Just last week, Barclays Capital (BCS) lowered its projections for U.S. ad spending to a negative 10% next year and a positive 1% in 2010. Every one of the traditional media platforms is getting hit, with newspapers (no surprise) taking the brunt of the pressure, with a drop of 17%, followed by TV (minus 15.5%), magazines (minus 15%), and radio (minus 13%). While other researchers aren’t offering prophesies quite so dire, one thing is clear: This is already no typical ad recession. In 1991, ad spending dropped a mere 1.9% from the prior year, while in 2001 it fell only 6.2%.

In a round table hosted by Canada’s Boards Magazine, Pescovitz shared his vision of advertising 2.0:

“It’s a really interesting time because previously there’s been this wall, necessarily so, between the editorial side and media, but with the rise of underground media to become mass media in the form of blogs and other kinds of systems, there’s an opportunity for marketers to join in the conversation between authors and readers in an open and transparent way. To be honest, I have a great time talking to ad agencies and marketers and companies about ways to connect with our audience and our community.”

My reading selection for this holiday break: Michael Wolff’s The Man Who Owns the News — how Rupert Murdoch built his father’s Australian newspaper company into today’s most important global media empire over the past 35 years. When he moved to New York in 1974, it was a time when “there are no real national news outlets. The New York Times is a metropolitan paper. The Wall Street Journal is a specialty business publication. USA Today does not exist. CNN does not exist. Cable television and cable news do not exist.”

Engadget readers of a Fujitsu laptop review brought Asus’s WePC project into the discussion. This is a new approach to “conquest marketing,” the tactic where brands buy ads alongside editorial coverage of their competitors. Only this time it’s free and organic — which, I bet, means it will be more effective.

For most of the past year, the voices of the American Express OPEN Forum blog have come from outside business experts such as Guy Kawasaki, Anita Campbell, Techdirt and the professors at the Wharton School of Business. Recently, American Express found its own voice and added it to the conversation. Not the voice you’d expect — “Hey, check out the Gold Card!” — but a voice that sounds like a human being with some advice for small business owners.